UBS Group is preparing to reduce more than half of the Credit Suisse Group’s workforce following the emergency takeover of the bank. The impact of these job cuts is expected to be felt primarily by bankers, traders, and support staff in Credit Suisse’s investment bank located in London, New York, and certain parts of Asia.
When will the job cuts happen?
As per a report in Fortune, staff has been told to expect the cuts in three rounds, with the first round projected to take place by the end of July, followed by two additional rounds tentatively planned for September and October.
UBS, which recently completed the acquisition and now has a combined workforce of approximately 120,000 employees, aims to save around $6 billion in staff costs over the coming years.
Quoting sources, Fortune reports that UBS plans to reduce the total combined headcount by roughly 30 per cent, or 35,000 individuals.
This estimate aligns with an approximate reduction of 30,000 predicted this month by analysts at Redburn. Credit Suisse’s current headcount stands at approximately 45,000 employees.
How will the job cuts affect the global financial sector?
The reduction in staff at Credit Suisse is expected to exacerbate an already challenging year for global financial sector jobs, as other major banks such as Morgan Stanley and Goldman Sachs have also announced substantial cuts.
Watch | Credit Suisse is now a part of UBS | World Business Watch
UBS had earlier signalled its intention to significantly scale back the size of Credit Suisse’s investment bank, which experienced a $5.5 billion loss due to the Archegos Capital Management scandal in 2021.
Earlier this month, the company’s chief executive Sergio Ermotti warned that the coming months will likely be “bumpy”. He said that the UBS, and Credit Suisse merger will demand “waves” of difficult decisions, including regarding employment.
Although UBS initially planned to retain the top 20 per cent of dealmakers, particularly those focused on technology, media, and telecoms, many high-performing bankers have already left or been hired by rival institutions.
UBS as per the Fortune report aims to retain most of Credit Suisse’s private bankers, particularly in the Asia-Pacific region, where a few hundred private bankers are expected to join UBS’s existing team of over 1,200.
As per the report, a source revealed that the company will also need to retain staff responsible for managing Credit Suisse’s structured loans to wealthy clients and the equity derivatives books.
UBS and Credit Suisse integration
Regarding the Swiss domestic business, UBS reportedly intends to make a decision in the third quarter on whether to fully integrate it with its own Swiss unit, pursue alternative options such as spinning it off or listing it publicly, or adopt another approach.
The fate of the Swiss bank has drawn significant attention. The initial job cuts are likely to exclude roles related to the overlapping areas of the Swiss businesses. However, if the two domestic businesses are merged, it is estimated that up to 10,000 jobs could be eliminated.
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